Many years before Adam Smith, numerous theologians associated with the
School of Salamanca, such as Domingo de Soto, Juan de Lugo, Juan de
Mariana, Luís Saravia de la Calle, Martin de Azpilcueta, Luis de Molina,
Leonard Lessius, Thomas Cajetan, and Francisco Garcia had made great strides
in the development of economics. Specifically, these theologians, otherwise
known as the “Scholastics,” analyzed and argued against price and wage
controls by explaining that the only “just” prices and wages are those that are
set by the market, examined and pushed back against prohibitions on usury,
understood the concept of time preference, and helped develop monetary
theory in multiple ways. They also demonstrated that all of this was consistent
with the Catholic religion. This paper analyzes the ways in which these early
theologians contributed to the development of economics and reconciled it with
their Catholicism.